Other items: Community service replaces restitution; Kirkland firm buys KnowledgeBase.net; Former biotech CFO is added to board ...

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Gov. Christine Gregoire signed a letter yesterday in support of efforts by Grant, Snohomish and Spokane counties to compete for an aircraft-assembly plant that Airbus parent European Aeronautic Defence and Space (EADS) might build in the U.S.

Earlier this year, EADS launched a competition for states to vie for the plant, which would be built only if the aerospace giant wins an Air Force tanker contract. Boeing originally won a contract to supply the tankers, but that deal was derailed by the company’s procurement scandals, and the Air Force plans a new competitive bid process.

In her letter of support, Gregoire said, “Washington is the right place for EADS to invest in its North American future.”

Microsoft

Community service replaces restitution

Jeffrey Parson, the Minnesota man sentenced to 18 months in prison in January for unleashing a version of the Blaster computer worm into the Internet, no longer has to worry about that big restitution payment to Microsoft.

Parson had owed Microsoft $498,000 in restitution, but in court papers filed yesterday, both parties agreed that he instead will serve 225 hours of community service during his three years of supervised release after his prison term ends.

The community service is not allowed to occur in an area that has computers or Internet service.

Talisma

Kirkland firm buys KnowledgeBase.net

Kirkland-based Talisma said yesterday it acquired KnowledgeBase.net of Los Angeles for an undisclosed amount of money.

Prior to the merger, Talisma was partnering with KnowledgeBase.net by integrating its software into Talisma’s customer-relationship-management software. Talisma will now fully incorporate KnowledgeBase.net’s technology, intellectual property and customer base into its operations.

Talisma plans to keep the company’s Los Angeles office open and hire KnowledgeBase.net’s employees and management team, including Chief Executive Alex Kazerani. In total, the company will have 259 employees.

Seattle Genetics

Former biotech CFO is added to board

Seattle Genetics said yesterday that David Gryska has joined its board of directors. He replaces Doug Williams, who is leaving the board to concentrate on his role as chief scientific officer of ZymoGenetics.

Gryska was chief financial officer of Scios until October 2004. Scios, a California biotech company that makes coronary and inflammation drugs, was sold to Johnson & Johnson in 2003 for $2.5 billion.

Compiled from Seattle Times

business staff

Onex

Boeing union asked for pay, benefits cuts

Canadian investment firm Onex, which has agreed to buy Boeing’s commercial-aircraft operations in Kansas and Oklahoma, is asking the Machinists union for cuts in wages and benefits.

Steve Rooney, president of the local International Association of Machinists and Aerospace Workers union, told members in a memo that Onex has proposed cuts in all areas of the union’s collective-bargaining agreement with Boeing. Rooney declined to elaborate on the cuts or the changes Onex wants.

The acquisition is contingent on Onex reaching an agreement with the labor unions, Rooney said. The deal is expected to close in the second quarter.

Onex officials declined to comment. They have said in the past, however, that they want to make the new company leaner and more competitive.

Delta Air Lines

Technical division to be restructured

Delta Air Lines, the nation’s third-biggest carrier, said yesterday it will restructure its technical-operations division in a move to save $240 million over five years.

The airline, which has been trying to cut costs, said in a filing with the Securities and Exchange Commission that it plans to hire two suppliers for heavy maintenance work, resulting in a 34 percent cost reduction. Delta said Miami-based Avborne will work on its MD-88 and MD-90 fleet types while Vancouver-based Air Canada Technical Services will work on the 757 and 767 fleets.

Atlanta-based Delta said it will be responsible for monitoring proper execution of its maintenance program by the vendors. The company said in its filing that the moves announced Tuesday will contribute to its previously announced elimination of 1,600 to 2,000 jobs in its technical-operations division.

Consumer electronics

Circuit City, Best Buy delay reports

The nation’s top two consumer-electronics retailers said Tuesday they would delay their fourth-quarter earnings reports because of unrelated accounting issues.

Richfield, Minn.-based Best Buy Co., the larger of the two chains, said it would report fourth-quarter earnings on April 1, two days later than expected. The delay will allow the company to report a $50 million tax benefit related to its former Musicland Group subsidiary.

Separately, Richmond-based Circuit City Stores Inc. said it would hold off on its results until the completion of a lease-accounting review that could reduce net income for the fourth quarter and fiscal 2005. The company had expected to release the numbers Wednesday but now expects to report them “within seven to 14 days,” according to Michael Foss, the company’s chief financial officer.

Micron

Cost reductions lift 2nd-quarter earnings

Boise-based Micron Technology, the largest U.S. maker of computer memory chips, earned $117.9 million in the second quarter after it cut manufacturing costs and shifted production to more profitable products such as camera sensors.

Net income was 17 cents a share in the period ended March 3, compared with a net loss of $28.3 million, or 4 cents, a year earlier, the company said. It was the first profit in the second quarter in five years. Sales rose 32 percent to $1.31 billion from $991 million.

The profit topped 15 cents a share, the average estimate of 23 analysts surveyed by Thomson Financial.

The company is the third-largest producer in the $26.4 billion memory-chip industry behind South Korea’s Samsung Electronics and Hynix Semiconductor. Micron now devotes about 20 percent of its production lines to making products other than memory chips, CEO Steve Appleton said.

Sears Holdings

Report: 400,000 face pay cuts in ’06

Sears Holdings plans to cut pay and benefits for its work force of 400,000 early next year, according to a published report.

The retail giant was created last week through the $12.3 billion merger of Sears, Roebuck and Kmart Holding.

Company spokesman Chris Brathwaite would not confirm yesterday that Sears planned any cuts in pay or benefits, as the Detroit Free Press reported, but he said Sears’ employees were sent an e-mail Monday informing them that they would be told next month of changes to their benefits packages, to be implemented early next year.

Brathwaite said the company also would notify employees in April of layoffs at the two headquarters. He did not say how many of the 6,000 corporate employees would lose their jobs.

Analyst Kim Picciola at Morningstar said she would have expected pay and benefit reductions to occur around the same time as the layoffs to accelerate the cost savings.

Compiled from The Associated Press and Bloomberg News